Why the Texas ruling on Obamacare is on shaky legal ground

By SIMON F. HAEDER & VALARIE BLAKE

December 18, 2018
Tuesday PM

(SitNews) - A Texas judge has ruled that the Affordable Care Act is unconstitutional. For now, his decision has no immediate effect except to toss another fire bomb at a law that has helped 20-plus million people gain insurance and expanded insurance for almost all Americans by such things as requiring insurers to cover pre-existing conditions.

Based on our expertise as health policy scholars, we argue that the ACA is well-settled law by now. This ruling will likely not undo the law. It does, however, add more uncertainty to the ACA while also showing how much Republicans continue to be willing to fight to destroy the law.

Politics heavily shaped this case. Republican-led states sought a friendly judge in a Texas district court to yet again challenge the constitutionality of the ACA. And California took over the defense of the ACA when the Department of Justice refused to defend its own law.

Judge O’Connor’s opinion addresses three issues: standing, constitutionality of the individual mandate, and a legal principle called severability – that is, should the rest of the ACA stand if the individual mandate is held to be unconstitutional.

First, O’Connor agreed with the plaintiffs that they have standing to bring this case. The plaintiffs argued that the individual mandate injures their constitutional rights by forcing them to buy health insurance.

Yet ironically, it is the elimination of the tax penalty that prompted this lawsuit. O’Connor suggested that people will feel nonetheless beholden to follow the law even without the penalty. We find the argument that an unenforced law can cause harm is absurd and merits serious reconsideration on appeal.

Next, O’Connor held that the individual mandate is unconstitutional. In NFIB v. Sebelius, the Supreme Court upheld the individual mandate as a tax. With Congress reducing the individual mandate penalty to zero in the 2017 tax bill, the plaintiffs in the Texas case argue it no longer functions as such.

Yet, we think that once more Judge O'Connor ignored reasonable arguments. For one, California argued there are still ways in which the mandate functions as a tax, as some unpaid funds will still be collected in the future. Additionally, many related provisions of the ACA remain intact such as hardship exemptions and reporting requirements.

Moreover, the original rejection of the individual mandate in NFIB v. Sebelius was that it violated the commerce clause of the Constitution by coercing consumers. This may no longer be valid with the penalty being zeroed out.

This issue is, in some ways, the lowest stakes part of the case, as the new tax law ends the penalty (and effectively the individual mandate) on Jan. 1, 2019. But it does control whether the third issue – severability – arises. And, there is symbolic value in being allowed to say that no aspect of the ACA is unconstitutional.

Last, in what we consider the most drastic and overstepping aspect of the opinion, Judge O’Connor kills the entire ACA. Emphasizing how “essential” the mandate is to the law, he states that Congress would not want any of it to stand without the individual mandate. Yet, Congress did speak in 2017. It did not repeal the whole of the ACA when they effectively wiped out the individual mandate. It must have thought the rest of the ACA could stand without the mandate.

While important, the individual mandate also does not render the ACA completely worthless. The mandate, which had been used as the stick to enforce compliance, may be gone, but carrots like subsidies to purchase insurance remain and will keep many people in the insurance market.

Wending its way to the Supreme Court?

So what’s next? California has indicated that it intends to appeal the matter to the 5th Circuit Court (which covers Texas, Louisiana and Mississippi), but it is possible that Judge O'Connor may sit on the case for a period before this can happen. We believe that if the 5th Circuit is reasonable, it will overturn the verdict.

Actions of these two courts will determine whether there is sufficient uncertainty or danger to the ACA to merit the Supreme Court’s review.

Meanwhile, while heartburn medicine sales may have risen and Twitter has gone alight, in practice, nothing changes. Judge O’Connor did not issue any injunction to stop the enforcement of the ACA. And for now, the Trump administration has indicated that it will continue to enforce the law until ultimately settled.

Ultimately, the weakness of plaintiffs’ case means this litigation will likely end, whenever it does, with the ACA largely intact. But in the meantime uncertainty and confusion will reign, and politicians will spin well-worn narratives that the ACA is fundamentally flawed and unlawful.

What if the ruling is upheld?

If the ruling is ultimately upheld, and the ACA really is dead for good, the changes for the American health care system, and every American, would be dramatic.

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